TORONTO,
Dec. 19, 2013 /PRNewswire/ - Exco
Technologies Limited (TSX: XTC) today announced that it has
signed a definitive agreement with Automotive Leather Company Group
(PTY) Limited ('ALC'), a private company organized under the laws
of South Africa, whereby a
wholly-owned subsidiary of Exco would acquire all of the shares of
ALC.
Pursuant to the terms of the definitive
agreement, subject to receipt of applicable regulatory approvals
and other customary closing conditions, the shareholders of ALC
will receive approximately $17.2
million in cash and the issue from treasury of 973,895 Exco
shares. Exco's cash contribution will be funded primarily
through the use of its operating credit facility which will be
increased to accommodate the cash payment amount.
The closing is expected to occur in the second
quarter of fiscal 2014. In 2011 and 2012 ALC had revenue of
approximately $78 million and
$86 million respectively. In
2013, ALC sales will be approximately $100
million and is expected to grow over the next several years
to approximately $140 million as a
new seat cover program for the family of Mini models launch over
the next 16 months. The transaction is expected to be
immediately accretive although rates of return will be impacted by
expensing due diligence and closing costs and will also be impacted
as ALC is integrated and the Mini business is launched.
ALC specializes in the manufacture and export of
luxury leather interior trim components to the middle and luxury
automotive sector. The primary customer is BMW and its tiers
although other German OEMs and their tiers are also customers.
ALC's current business dates back to 1990.
In 2002 it acquired a large portion of the South African trim
business of BMW. Since then it has supplied quality leather
seat covers and other interior trim components to BMW and other
German OEMs and their tiers. After closing, several shareholders
will continue to manage the ALC business and their significant
shareholdings in Exco will ensure that their interests are aligned
with those of Exco.
In addition to ALC's traditional production site
in the Rosslyn Automotive Supply Park in South Africa, it has in 2011 established a
state-of-the-art production site near Sofia, Bulgaria and is currently establishing
another production site in the Kingdom of Lesotho. Taken together these production
sites employ approximately 2,000 employees. ALC also has a
customer service and technical centre in Germany with approximately 25 staff enabling
it to better service its German OEM customer base.
Exco has had extensive leather and seat trim
experience over the years which has enabled it to develop its
Automotive Solutions Group into a globally competitive supplier of
all manner of fabric, vinyl and leather cut and sewn
products. Exco believes that this experience, combined with
the specialized capabilities of ALC in making high quality leather
seat covers, will enable it to supply the German OEMs in
Europe and other parts of the
world while also giving Exco a state-of-the-art production facility
in Eastern Europe from which to
supply the European automotive market with its other interior trim
products.
A conference call to discuss the transaction
will be held on December 20, 2013 at
10:00 am (Toronto time) and can be accessed by dialing
(647) 427-7450 for local (Toronto)
calls or toll free 1-888-231-8191. To access the live audio
webcast, please log on to www.excocorp.com, or
http://www.newswire.ca/en/webcast/detail/1282811/1415287 a few
minutes before the event.
Exco Technologies Limited is a global
supplier of innovative technologies servicing the die-cast,
extrusion and automotive industries. Through our 13 strategic
locations, we employ 2,316 people and service a diverse and broad
customer base. Upon completion of the transaction Exco will have 18
locations and employ approximately 5,000 people in 12
countries.
This news release contains forward-looking
information and forward-looking statements within the meaning of
applicable securities laws. We use words such as "anticipate",
"plan", "may", "will", "should", "expect", "believe", "estimate"
and similar expressions to identify forward-looking information and
statements especially with respect to the likelihood that the
announced acquisition will close,that it will be accretive and that
its sales and other financial performance will be as announced.
Such forward-looking information and statements are based on
assumptions and analyses made by us in light of our experience and
our perception of historical trends, current conditions and
expected future developments with respect to securing business and
pricing thereof, as well as other factors we believe to be relevant
and appropriate in the circumstances. Readers are cautioned not to
place undue reliance on forward-looking information and statements,
as there can be no assurance that the assumptions, plans,
intentions, transactions or expectations upon which such statements
are based will occur. Forward-looking information and
statements are subject to known and unknown risks, uncertainties,
assumptions and other factors which may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed, implied or
anticipated by such information and statements. These risks,
uncertainties and assumptions are generally described in the
Company's Management's Discussion and Analysis included in our 2013
Annual Report, in our 2013 Annual Information Form and, from time
to time, in other reports and filings made by the Company with
securities regulatory authorities. Furthermore, in this case
there is the additional risk that the regulatory authorities do not
approve the purchase of ALC or that the conditions contained in the
Share Purchase Agreement will not be met and that the transaction
will not close as described above or will close at a different
purchase price or on different terms.
While the Company believes that the
expectations expressed by such forward-looking information and
statements are reasonable, there can be no assurance that such
expectations and assumptions will prove to be correct. In
evaluating forward-looking information and statements, readers
should carefully consider the various factors which could cause
actual results or events to differ materially from those indicated
in the forward-looking information and statements. Readers are
cautioned that the foregoing list of important factors is not
exhaustive. Furthermore, the Company disclaims any
obligations to update publicly or otherwise revise any such factors
or any of the forward-looking information or statements contained
herein to reflect subsequent information, events or developments,
changes in risk factors or otherwise.
SOURCE Exco Technologies Limited